Euro - Dollar Forex Pair Weakens as Debt Concerns Conflict With Carry Trade Support
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Euro - Dollar Forex Pair Weakens as Debt Concerns Conflict With Carry Trade Support

Euro - Dollar Forex Pair Weakens as Debt Concerns Conflict With Carry Trade Support


Inflamed fears that the Greek debt crisis will spread to its European members made a significant sell off quite apparent in the single currency.

The Euro lost 189 pips against the Dollar on the FX spread betting markets to finish the week at $1.4346.

Unfortunately for Greece, investors still seem to believe that it's going to default or at least 'technically default' with the most likely event being an extension to the various bond expiry dates.

With all this negative information circling through the Eurozone we would be forgiven for thinking that the Euro was a tad overvalued.

However, with the US battling its own economic slowdown, there is little chance of any imminent rate hike on the other side of the pond whilst the ECB has signalled that interest rates are likely to rise in July.

With the carry trade moving ever further in the Euro's favour, plus a bit of Far Eastern reallocation of Dollar investments into Europe, we may be in for an interesting time as bad news fights it out with actual income and investment transfers.

There is good support for the Euro - Dollar forex pair at $1.4320/30 and below here at $1.4260/70 ultra bears will be looking for a return into the mid $1.30's.

On the plus side there is resistance at $1.4365/75 where we failed early today but then there is not much all the way back up to $1.4440 and $1.4520/30

The Canadian Dollar took a beating from its US counterpart, spurred by a fall in crude oil prices, the country's biggest export.

A government report on unemployment pointed at a drop to 7.4%, the lowest level since the beginning of 2009, which generally would have lifted demand.

But the interpretation for a 51 pip increase in the USD/CAD pair to $0.9798 could be that fresh worries that the world economy is stuttering beat the individual country's good news.

FX Spread Betting


For more news and information about the FX spread betting markets also see:



FX Spread Betting - Companies Comparison


EUR / USD Daily - Spread Size 1 1 1 2 0.8 1 1 1
EUR / USD Daily - Min Stake £1 £0.50 £0.50 £0.5 £1 £1 £1 £1
GBP / USD Daily - Spread Size 2 2 2 3 0.8 2 2 2
GBP / USD Daily - Min Stake £1 £0.50 £0.50 £0.5 £1 £1 £1 £1
EUR / GBP Daily - Spread Size 1 2 2 1 1 1 1 2
EUR / GBP Daily - Min Stake £1 £0.50 £0.50 £0.5 £1 £1 £1 £1
USD / JPY Daily - Spread Size 0.8 2 1 2 0.8 0.8 0.8 2
USD / JPY Daily - Min Stake £1 £0.50 £0.50 £0.5 £1 £1 £1 £1
Comparison Notes.



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'Euro - Dollar Forex Pair Weakens as Debt Concerns Conflict With Carry Trade Support' by DB, updated 13-Jun-11

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